HR Practices and Business Performance: what makes a difference?

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HR Practices and Business Performance: what makes a difference?

Sue Hutchinson, Nick Kinnie, John Purcell Work & Employment Research Centre (WERC)

School of Management University of Bath

Paper to be presented at the Conference, ‘Organisational Renewal: Challenging Human Resource Management’, 15 November 2001, Nijmegen School of

Management, Netherlands.

This paper is based on current research for a CIPD funded project ‘People and

Performance’. It is in draft form and should not be quoted without permission from the authors.


HR Practices and Business Performance: what makes a difference?


Over the last 10 years considerable research has been directed at understanding the relationship between HR practices and business performance, and whilst much progress has been made identifying possible associations there remain serious gaps in our

knowledge. In particular, the research leaves unanswered a number of key questions concerning how and why HR practices impact on the performance of the business. This lack of contextual information severely limits the value of existing research to both academics and practitioners. There is a clear need for research that employs methods which are more appropriate for understanding the detailed and intricate relationships between HR practices and business performance.

This paper draws on research currently underway which seeks to examine how and why HR practices influence business performance. In particular it examines the importance of discretionary behaviour by employees and managers and the effect of variations in this behaviour on business performance.

Previous Research

Many studies have examined the relationship between HR practices and business performance at differing units of analysis ranging from the level of the

plant/establishment (Arthur 1994, MacDuffie 1995, Youndt et al 1996, Thompson 2000, Applebaum, Bailey, Berg & Kallenberg 2000), to the corporation (Huselid 1995). Our concern in this paper is not to review these studies, since this has been more than

adequately done by many others (for example Dyer & Reeves 1995, Becker and Gerhart 1996, Wood 1999, Richardson &Thompson 1999), but rather to identify some of the issues that this research has failed to address.


Much of the existing studies are based on large scale postal surveys which are analysed using sophisticated quantitative techniques and recent reviews (Purcell 1999, Richardson & Thompson 1999, Wright & Gardner 2000,) have discussed in detail some of the shortcomings in this research. Briefly these are:

- variance in the levels of analysis which range from plant to business unit to corporate level, with the majority of studies exploring the corporate level of analysis.

- a lack of consensus over what the core HR practices should be with different researchers claiming success for rather different HR packages. For example employment security is included in some (Delery & Doty, 1996, Ichniowski et al 1994, Peffer 1998) but notably absent from others (Huselid 1995, Arthurs 1994). - there is no agreement on the level of specificity of HR practices – in other words the

level of description of each practice. For example, ‘sophisticated recruitment and selection’ does not describe the techniques, which is of little help to the practitioner. - these practices are measured in different ways. One study, for example, may look at

the existence of a practice (‘yes/no’ answer), another at the percentage of people covered by that practice (Huselid, 1995), another at the amount or level of the practice (e.g. how much training do employees receive).

- there is very limited use of performance measures and these are often drawn from the corporate level or based on self-assessment.

- sophisticated analytical techniques are used which are hard to understand (for both practitioners and some academics).

- few studies take account of the reaction of employees making it difficult to explain how HR practices feed through into improved levels of performance. Most studies are


based around self-completing questionnaires and rely on the views of a single

respondent to represent the organisation – which must give rise to concerns about the levels of accuracy of such data.

However, perhaps the most marked characteristic of this research is that it typically adopts an input-output model. This assumes that there are a series of inputs on the left-hand side of the model and a series of outputs on the right left-hand side with very little know about what goes on inside the model (the so-called ‘black box’ problem). The inability to discuss how and why HR practices are linked to business performance is, of course, a function of the largely quantitative approach to data collection which has been adopted. Associated with this is the debate on causality – is it that high performing firms have the resource to invest in HR practices or is it that high performance is in some way

influenced by HR practices? Few studies have explored this problem which can only be addressed in longitudinal or time series studies (Purcell, 1999).

This research is typically extended to the debate between what has been referred to as the best practice school which believes that there is one set of practices which can be used in all circumstances and the best fit school which argues for a more contingent approach (Purcell, 1999).

One notable exception to this pattern of research is work carried out by Appelbaum and her colleagues (Appelbaum et al, 2000) who investigated the links between high

performance work systems and performance in a major study of 44 manufacturing sites in steel, apparel and medical equipment between 1995 and 1997. They identified three types of people management practices (Appelbaum et al, 2000:118-120) which they thought were critical to business performance. Skill enhancing practices are important because changes in work organisation are only effective if employees have adequate skills to take up these opportunities. In the past most of the attempts have been to narrow down work so that it can be repeated, while the task now is to expand opportunities, typically through staffing practices such as recruitment and selection, training and development and job re-design. Motivation enhancing practices are important because


even if we assume that employees have the opportunity and the skill, it is still essential that they have the motivation in order to take up these opportunities. Classically these revolve around extrinsic and intrinsic incentives. Moreover, the concept of mutual trust is important in creating a climate where employees feel able to contribute. The

stakeholder concept can be influential sometimes where it is clear that employees have a vested interest and the role of the supervisor or team leader is critical here. Finally, involvement enhancing practices are concerned with designing work systems so that employees have a chance to become involved and participate in decision making. Critically important here was decentralisation leading to greater authority to solve problems and to propose changes. This might be in the form of self-directed teams or quality circles while the ability to draw on others outside their immediate group through networking and horizontal communications is also important. Here workers undertake both routine and non-routine tasks (Adler et al 1999). Applebaum et al (2000) refer to this as line and off-line opportunities to participate.

Overall, the research to date has been frustrating for those seeking to understand how and why HR practices influence business performance. Indeed, existing studies have actually posed more questions than they have answered because of the analytical model and research methods employed. We argue that both the model used and the methods for collecting data need to be changed if we are to begin to answer these key questions. We will now explain the theoretical background to our approach and then describe the methods of data collection used in our research.

Discretionary behaviour, employee attitudes and organisational performance

We argue that both the best fit and the best practice models miss the point: they assume that the policies which are put forward are actually put into operational practice. This is a fundamental assumption which cannot be justified. For a whole variety of reasons well designed policies are often not implemented in the way in which they are intended, an issue which has been discussed extensively elsewhere (Legge, 1995).


This opens up a much wider area for study and one which is crucial for understanding the links between HR practices and business performance. We need to understand how the various practices are actually implemented: what actually goes on inside the black box? In order to understand this we need to tale a step back and explore the links between discretionary behaviour, employee attitudes and business performance.

Appelbaum and her colleagues (2000) have recognised that discretionary behaviour is one of the keys to understanding the links between HR practices and organisational performance: ‘plant managers who invest in the skills of front-line workers and include these workers in decision-making activities elicit discretionary effort by employees. This effort increases operating efficiency and competitive advantage’ (Applebaum et al 2000:235). Discretionary effort was also central to MacDuffie’s analysis in the motor vehicle industry (1995). We explore this concept in more detail and draw on the work of Fox (1974:16) who distinguished between two characteristics of work roles. 'Task range' which refers to the variety of tasks in a job, which at the one extreme can be highly specific and at the other very diffuse. The second characteristic is 'discretionary content' which looks at the extent to which the behaviour needed in a job which is highly

specified or diffuse. More critically he argued (1974:18) that 'every job contains both prescribed and discretionary elements' and the discretionary elements 'requires not trained obedience to specific external control, but the exercise of wisdom, judgement and expertise. The control comes from within, it is in a literal sense, self control. The

occupant of the role must himself (sic) choose judge, feel, sense, consider, conclude what would be the best thing to do in the circumstances, the best way of going about what he is doing' (1974:19).

Moreover, Fox argues that the key link with performance is to get employees not just to do their job but to act beyond contract to go over and above what they are formally required to do. Rather than just carrying out their job mechanically, to the minimum specification required the aim is to try to get employees to use their imagination,


creativity, enthusiasm, initiative and intimate knowledge of the organisation1.

Thus we argue that employee attitudes, particularly job satisfaction and organisational commitment, influence the exercise of discretion by employees which is in turn linked to business performance (Guest & Conway, 1997). One of the key ways to improving performance, therefore, is to improve the levels of job satisfaction and organisational commitment which encourages employees to exercise their discretion and act beyond contract. The exercise of this discretion may create a virtuous circle whereby there is an increase in job satisfaction and organisational commitment which further encourages employees to put in effort over and above the minimum required. Secondly, and crucially, the exercise of employee discretion is affected by the way in which managers exercise their own discretion. Even in the most standardised organisation managers will have some discretion as to how they put HR practices into operation and employees are more likely to act beyond contract if managers behave in ways which stimulate and encourage this kind of behaviour. So we are not only looking at employee discretionary behaviour, but also manager discretionary behaviour and crucially it is the interplay between these two which is linked to business performance.

These links between employee attitudes, discretionary behaviour and performance outcomes represent the core of the model which we present in Figure 1. In order to understand what affects these factors we need to step back and consider the HR practices and job design characteristics which affect the ability and skill of employees, their level of motivation and their opportunities to participate in decision making. Figure 1

identifies the key HR practices as being recruitment, training and development, appraisal, pay, career opportunities and job security. The key job design characteristics are the degree of job challenge and the level of teamworking.

Having established the theoretical background to our argument and presented our analytical model we will now describe the methods of data collection used to explore

1 This makes a number a number of assumptions, for example that there are opportunities to exercise this


Training and









Job challenge



Management encouragement





---Opportunity to


Organisation commitment


Discretionary Behaviour


Job satisfaction


outcomes +


Job security

Figure 1: High Performance Work Systems and HR policy and



Research methods

The research, which commenced in September 1999, is based on a two and a half-year longitudinal study which investigates how and why people management practices affect business performance2. Sponsored by the Chartered Institute for Personnel and

Development, the study looks at 12 organisations from a wide range of sectors including manufacturing, retail, finance, professional services, IT and the NHS. In each case a unit of analysis was chosen as the focus of our research, such as the southern region sales force for one of the financial services organisations, and a clinical directorate in the case of the Trust hospital. The research design is both qualitative and quantitative and seeks to overcome some of the problems of the existing research discussed above. Extensive interviewing is conducted both at corporate level and at the unit of analysis with senior decision-makers, first line managers/team leaders and front line employees (such as financial consultants, sales associates). These latter interviews, which are structured and use an administered questionnaire (with control questions from WERS 98), seek to explore how people management practices impact on employee attitudes and behaviours. They are repeated after 12 months to allow us to track changes that are taking place both at an organisational level and in the unit of analysis.3 We believe that one of the strengths of this research are these individual face-to face interviews with employees (in other words, those at whom the practices are aimed at) which allows us to provide a fairly accurate assessment of the impact of the HR practices that exist in the unit. The multiple respondents design also enables us to uncover differences between stated policies and the implementation of those policies. The interview data are examined alongside

performance data (financial, operational and HR measures) and information on the HR policies for the unit of analysis. Thus these data allow us to measure more precisely than previous studies the relationship between HR practices, employee outcomes and


2 Other members of the research team are: Kim Hoque, Bruce Rayton and Juani Swart. 3 At the time of writing the majority of these second year interviews had yet to take place.


This paper draws on research conducted in one of our case study organisations to analyse the links between discretionary behaviour, employee attitudes and business performance. We first describe the context of the case and then discuss some of findings from our employee interviews in detail.

Case study

Omega is a successful growth company and one of the largest retail organisations in the UK, employing a large number of staff in branches across the country4. Although the industry has seen very little growth in recent years Omega has successfully increased its market share through a policy of lowering prices (the company claims to have reduced prices by 7.5% over the last four years) and improving customer service. It currently holds a dominant share of the UK market in its core business, and is growing rapidly in related areas. The company plans to continue expanding in the UK opening up new branches on brownfield sites in regeneration areas.

The organisation underwent considerable change in the mid 1990s in order to improve its competitive position, with a much greater emphasis on a customer facing culture (or as one Head of HR remarked ‘1995 saw the evolution of a customer-focussed business’). One of the many changes introduced at this time was the balanced score card approach to measuring business performance, originally developed by Kaplan and Norton (1992). In Omega the scorecard has four quadrants – people, finance, customers and operations and each branch’s performance is measured against specific targets in each area. In the people quadrant, for example, targets include recruitment, development, retention, labour

turnover, absence and staff morale (taken from the staff attitude survey). Although the four quadrants are not weighted, one retail director we interviewed considered the ‘people’ quadrant to be the most important, as he explained ‘if we can recruit, maintain

and deliver fantastic people then operationally we can deliver’. The introduction of this

approach brought about a much greater focus on people and customer issues in the branches which historically had been driven by financial and operational results, and a


consequent change in culture which is seen as a major catalyst for Omega’s recent success.

Delayering also took place as part of the restructuring in mid 1990s and within the branches there are currently four levels: branch manager, senior managers, section managers and general assistants. Each branch is run by a branch manager whose job it is to provide coaching, guidance and support and to deliver the Omega ‘standard’. As one branch manager explained ’my role is to mobilise the team with a goal, to be energetic

and to be able to motivate people’. There is a senior management team which includes

operational managers responsible for departments and in an average sized branch (employing around 400 staff) this would comprise 5/6 managers which typically would include the branch manager, personnel manager, customer services manager and

operations managers. Each member of this team, including the personnel manager, takes a turn in managing the branch for around 20% of their working time so that they gain an understanding of the business issues. The personnel function within the branches (over two-thirds of branches have their own personnel manager) has undergone considerable change over the last 5/6 years, moving from a predominantly administrative and welfare role to a branch level senior management position. The role of the personnel manager includes taking responsibility for the payroll and controllable expenses and ensuring that the branch maintains productivity levels. This means focussing on the people measures such as absence management, employee appraisal and development, resourcing and succession planning. One of the benefits of the balanced score card approach has therefore been to make the role of the personnel manager much clearer within the branches and enabled the function to measure themselves against specific goals.

A more recent change within Omega has been the drive for consistency across branches and all policies, procedures and processes are centrally determined and their

implementation closely monitored. Each branch is governed by the company routines handbook which provides detailed information on how every task is to be performed - this is down to the minutest detail even including details on office layout, such as where


pictures should go on the wall, and where the waste paper bin should go! (referred to as

‘detail madness’ by one branch manager). On the HR side all policies and procedures are

highly centralised and controlled - the wages budget for example is fixed for each branch and there is no local flexibility on pay – something which was obviously a cause of great frustration in some of the branches we visited where recruitment, retention and staff quality were on-going major problems. Although the branches cannot function without these routines it is the way in which the rules and routines are implemented that is considered a key ingredient to success. It is management, in particular branch managers, who are responsible for how the policies and processes are implemented and their

behaviour is therefore critical to a branch’s performance. This is borne out by the preliminary results from year one of our research.

Our research focussed on the section manager population which is a first line manager position within the branch. Spans of control are normally 18 general assistants to each section manager and in a large branch there may be about 20 section managers covering different areas of the branch. In addition to being responsible for the day to day running of their areas section managers take responsibility for a range of people management tasks such as recruitment, training, performance appraisal, disciplinary and grievance issues, and pay enquires. The nature of the job is therefore fairly demanding, particularly on the people management side and this may partly explain why many branches face recruitment and retention difficulties with this position. We looked at four branches in a single region. All were in market towns with similar socio-economic profiles. Two of the branches were classified as high performing and two low performing, although which was which was not revealed to us until after the first year interviews. In total 43 section managers were interviewed using our structured questionnaire, representing over two – thirds of the section manager population in those branches.



Having described the organisational context of our case study we will now look in more detail at the links between employee attitudes, discretionary behaviour and organisational performance drawing on the empirical data which we have collected. Our discussion follows the development of our theoretical model by looking first at the exercise of employee and manager discretion, then considering employee attitudes and finally examining performance outcomes.

Employee discretion

We consider first the variations in perceptions of employee discretion across the four branches studied (Table 1). Any variations here will be particularly important since these jobs are supposed to be standardised across the whole company following routines and procedures set by head office. However, as Fox has argued ‘no role can be totally diffuse or totally specific', even in tightly controlled jobs some residual element of discretion always remains’ (1974:19-20).

Insert Table 1

Evidence of variations in this discretion is clearly present. There are, for example, marked differences between the branches on the extent to which employees claim they have influence over their job. Table 1 shows that 27% of employees in Branch C say they have ‘a lot’ of influence over their job, compared with 64% who say this in Branches A and B and a half who say this in Branch D. Only around one third of employees in Branch C are satisfied with their level of influence and 18% are

dissatisfied. This compares starkly with the other branches, especially Branch D where all the employees are satisfied with their level of influence over their job. These two measures are likely to be highly influenced by the way local managers implement the


rules set by head office. However, there are fewer variations in the extent to which employees find their job challenging (with a range between 82% and 100%), perhaps because this reflects the inherent nature of what is basically a very demanding job which is less susceptible to local interpretation.

Managerial discretion

We look next at variations across the four branches in the way local senior managers exercise their discretion when putting head office routines into operation. This is a particularly important area of discretionary behaviour since as one branch manager explained ‘the routines should be viewed as providing a focus and structure… they are

necessary in terms of delivering best practice but it is the way in which the rules and routines are implemented that makes them effective and brings them to life’.

Our research investigated this exercise of managerial discretion by collecting employee perceptions about senior managers in the following areas:

(i) Involvement and communication

(ii) Dealing with problems in the workplace and treating employees fairly; (iii) The respect employees get from their immediate line manager

(iv) The extent to which the line manager provides coaching and guidance

(v) How good employees feel the company is at sharing and exchanging knowledge and experience.

Insert Table 2

The results in Table 2 show that there is a high level of variation in employees’ perception of the exercise of managerial discretion. Employees in Branch C have a consistently poor perception of the way senior managers exercise their discretion; the


responses in this branch are either the lowest or equal lowest across all the measures. This suggests that senior managers in Branch C have a very controlling style of managing which is considered poor in terms of, for example, allowing staff to comment and

responding to suggestions from employees (18% agree that managers are good at these activities). This compares to around three quarters of employees in Branch B who believe this. These relatively poor results are repeated, but in a less extreme way, when the results for Branch C are compared with the others in terms of how good managers are at dealing with problems at the workplace, treating employees fairly, with the respect employees get from their line manager and with how good the company is at sharing and exchanging knowledge. The other distinct pattern is the consistently good performance of Branch B across all the measures.

The impact of local senior managers is clear to see here. Even though there is a heavy standardisation of routines local senior managers are able to exercise their discretion in how these are put into practice and this is clearly reflected in employee perceptions. The following quotes from our interviews reflect this:

‘It’s a good company to work for but the management within individual branches varies and HQ are often unaware of particular issues surrounding branch managers… terms of their style of management- there are different styles in different branches’

(Section manager)

‘Getting the right managers into the right branch is the biggest issue I have to deal with’.

(Regional Director)

Employee satisfaction and commitment

Having considered the variations in employee and managerial discretion we will now look at our evidence on employee job satisfaction and organisational commitment. If we look first at employee satisfaction with the sense of achievement they get from their job we find there are relatively few variations between the branches. Table 3 shows again


that Branch C has relatively low levels of motivation (54% are either very or fairly motivated) compared to 80% in Branch D and 92% in Branch B saying this. When we look at measures of employee commitment (Table 4) we find few variations in sharing values and loyalty, perhaps because these attitudes are less influenced by local senior managers and are more affected by wider corporate values which remain robust and pervasive. However, there are marked differences in pride (where only 46% in Branch C agree or strongly agree with this compared with around 90% in Branches A and D) and the perceived state of employee relations, where again only two thirds in Branch C say this is good or very good compared with 91% in Branch B.

Insert Tables 3 & 4

Perhaps most intriguing of all is that this pattern of satisfaction and commitment is also reflected in terms of attitudes towards certain HR practices as shown in Table 5. Both branches A and C have low scores for satisfaction with the level of training, and opportunities for career advancement. Variations in the levels of satisfaction with pay are especially interesting, given that pay rates for these employees are standardised, with as few as 9% of employees in Branch C being either satisfied or highly satisfied with their pay compared with 64% in Branch B. Employees who suffer from poor levels of satisfaction and motivation in general may well be transferring their feelings over to specific HR practices. This has profound implications for the focus on HR policies in providing the necessary environment for discretional effort since perceptions on and satisfaction with these policies is clearly influenced by the context in which they are applied.

Insert Table 5


Finally, we present some preliminary data on measures of performance in table 6 which compares branch performance data to the regional average.

Insert Table 6

It is clear from the data that Branch C is the poorest performer in a number of key areas. For example its expenses were 28% higher than the average and its profit was 34% lower. In contrast Branch B has expenses which were 2.4% lower than average and profits which were 21% higher. Branch A has profits which are 13% below the regional mean and Branch D has profits which are almost at the mean. Other measures of

performance also follow this pattern of Branches B and D generally being above average performers and Branches A and C being below average, with the performance of branch C being particularly poor.

There are, of course, many explanations for these variations in performance. It is possible that there are differences in the local context over which local senior managers have little control, for example the level of local competition may vary greatly between these branches. Measuring performance against targets may therefore be more appropriate since these are adjusted to reflect local circumstances, and we are currently exploring this. It should be remembered that all the branches have similar local labour markets and catchment areas and that routines and procedures are standardised throughout the

company. Even at this early stage of the analysis it is possible to trace a pattern of results which is repeated through the different kinds of data which links the exercise of

discretion, employee attitudes and branch performance.


The pattern of results across the four branches is fairly consistent. Branches A and C are generally lower in terms of managerial behaviour, employee discretion, employee

attitudes and overall performance compared with branches B and D. This shows clear evidence of a linkage of the kind we have proposed. We have reported our preliminary results here and further analysis is required, and we are particularly interested to see how the results from the second round of interviews compare with those from the first round. Despite these caveats there is clearly a strong association between employee attitudes on a wide variety of job design and HR practices, employee views on the quality of HR management applied to them, especially in the opportunity to participate, and branch performance. Given that the company is so centralised with detailed operational manuals covering every aspect of the managerial role and very little policy discretion, the only variance is the way managers actually apply the rules – or as one manager put it ‘bring them to life’. This is especially the case in the way people are managed. It clearly shows in the marked differences between employee attitudes in the four branches. While, of course, rigorous tests of causality need to be undertaken (and we will do this when we have the second year interviews and performance data) at this stage it is hard to avoid the conclusion that the most credible explanation for differences in performance is the way branch managers exercise their discretion in managing staff, especially in influencing how they, the staff, do their jobs.

Applebaum et al (2000) did not study this aspect of HR practice in their performance model, using a more general measure of trust in management. Our evidence, which is generally confirmed in the 11 other cases, is that the way managers encourage, allow and support the exercise of discretionary behaviour by employees is a crucial intervening variable. It has powerful policy and practice implications. The only published study we are aware5 of which takes a similar approach to ours is that of Bartel (2000) in her study of Canadian bank branches. She used some data from the employee attitude survey

5 We do know of two on-going studies undertaken by retail and finance companies which are focussed on

the question of the effect of managerial behaviour on employee and customer satisfaction and linking these to performance. In the past this has been stimulated by the influential study on Sears (Rucci, Kirn & Quinn 1998)


administered regularly in the bank6 and correlated these with branch performance data and case visits. Her conclusions confirm our own that branch managers ‘create a human resource management environment that can impact on branch performance’ (ibid: 20). In particular it was ‘the quality of the performance feedback system and the quality of communications between the manager and the staff which had significant affects on branch performance’ (ibid: 28). However she did not relate this to staff perceptions on discretionary influence over how their jobs were performed and it is this, following Applebaum et al (2000), which is crucial and is related to job challenge and satisfaction. Although we interviewed two-thirds of the population of section managers in these four branches the number of respondents is very small. The results, must of course, be treated with caution and much more research is needed by other research teams before we can be confident of the results and validity of the model. What we can assert with confidence, however, is that research methods which only ask managers about their policies and practices, and count how many policies are applied and the extent of coverage, can never be sufficient if we are to understand the connection between HR practices and business performance. If the central thesis on employee discretionary behaviours is correct then it is those who exercise this discretion that have to be the focus of research, that is the employees and first line managers.

6 Intriguingly we were told that the staff attitude survey in Branch C for the management population was

much more positive than our results. One explanation provided was that measures of staff attitudes were one of the branch managers key performance indicators and this had influenced how the forms were competed!


Table 1: Employee Discretion

Branch A Branch B Branch C Branch D

% % % %

My job is challenging

Agree 100 91 82 80 Neither agree nor disagree 9 10 Disagree 9 9 10

Generally, how much influence do you have over how you do

your job? A lot 64 64 27 50 Some 27 36 36 40 A little 9 27 10 None 9

How satisfied are you with the amount of influence you have

over your job?

Satisfied 82 82 36 100 Neither sat. nor dissatisfied 9 18 46 Dissatisfied 9 18 N=43


Table 2: Management Discretion

Branch A Branch B Branch C Branch D % % % %

How good are mgrs. at providing everyone with a chance to

Comment on proposed changes?

Good 55 73 18 30 Neither good nor poor 27 18 46 60 Poor 18 9 36 10

How good are mgrs. at responding to suggestions from


Good 27 82 18 60 Neither good nor poor 46 9 46 40 Poor 27 9 27

How good are mgrs. at dealing with problems at the


Good 73 82 55 70 Neither good nor poor 18 9 36 30 Poor 9 9 9

How good are mgrs. at treating employees fairly?

Good 64 100 64 70 Neither good nor poor 27 9 20 Poor 9 27 10

To what extent does your line manager provide coaching &

Guidance to help improve your performance?

To a great extent 46 55 27 40 To some extent 27 45 36 40 To a limited extent 27 9 20 Not at all 27

How satisfied are you with the respect you receive from your

Immediate line manager?

Satisfied 100 91 64 90 Neither sat. nor dissatisfied 9 9 Dissatisfied 27 10

How good do you feel the co. is at sharing & exchanging

Knowledge & experience?

Good 64 82 18 70 Neither good nor poor 27 18 64 20 Poor 9 18 10 N=43


Table 3: Job Satisfaction

Branch A Branch B Branch C Branch D % % % %

How satisfied are you with the sense of achievement you get

from your work?

Satisfied 64 73 64 80 Neither satisfied nor

dissatisfied 27 9 18 10

Dissatisfied 9 18 18 10

How motivated do you feel in your present job?

Very motivated 55 46 36 40 Fairly motivated 27 46 18 40 Not very motivated 18 9 36 10 Not at all motivated 9 10


Table 4: Employee Outcomes

Branch A Branch B Branch C Branch D % % % %

I share the values of the organisation

Agree 82 100 82 90 Neither agree nor disagree 18 18 10 Disagree

I feel proud to tell people who I work for

Agree 91 73 46 90 Neither agree nor disagree 9 27 36 10 Disagree 18

I feel loyal to the company

Agree 73 91 91 100 Neither agree nor disagree 27 9 9 Disagree

In general, how would you describe relations between

management and employees here

Good 73 91 64 80 Neither good nor poor 18 9 18 20 Poor 9 18


Table 5: Employees perceptions about certain HR policies and practices

Branch A Branch B Branch C Branch D

% % % %

Training & Development

How satisfied are you feel with the level of training you receive

in your current job?

Satisfied 46 82 36 90 Neither sat.nor dissatisfied 9 9 9 Dissatisfied 36 9 55 10

How satisfied are you with your current career opportunities?

Satisfied 64 91 55 70 Neither sat. nor dissatisfied 9 9 30 Dissatisfied 27 9 36

Pay and Reward

How satisfied do you feel with your pay?

Satisfied 46 64 9 60 Neither sat. nor dissatisfied 18 36 18 30 Dissatisfied 36 73 10

How satisfied are you with the method of appraising your


Satisfied 50 82 64 90 Neither satisfied nor dissatisfied 10 9 18 10 Dissatisfied 30 9 18

How satisfied do you feel with the rewards and recognition

you receive for your performance?

Satisfied 46 91 55 50 Neither sat. dissatisfied 46 9 27 30 Dissatisfied 9 18 20 N=43



(Based on averages for 12 month period feb 2000-feb2001)

Table 6: Percentage variation from regional average (20 branches)

Branch A Branch B Branch C Branch D

Availability -0.1 0.6 -0.8 0.3

Waste/known loss -5.5 4.7 -11.8 7.1

Shrinkage/unknown loss 5.4 63.5 -59.5 44.6

Operating expenses as % of sales 2.4 2.4 -28.2 -11.7

Waiting to be served 2.4 -6.9 -0.6 -3.3

Payroll costs as % of sales -4.3 14.8 4.3 0.1

Profit Contribution -13.0 21.4 -33.7 -0.1

Turnover £m 42.6 71.1 48.2 54.8

NB. Data has been corrected to ensure that positive figures reflect better than average performance and negative figures show worse than average performance.



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